Design, Implementation, and Evaluation of HR Leadership Development Programs

Transcription

1 Cornell University ILR School CAHRS Working Paper Series Center for Advanced Human Resource Studies (CAHRS) Design, Implementation, and Evaluation of HR Leadership Development s Karina Li Ming Kuok Cornell University, lk30@cornell.edu Bradford S. Bell Cornell University, bb92@cornell.edu Follow this and additional works at: Part of the Human Resources Management Commons Thank you for downloading an article from DigitalCommons@ILR. Support this valuable resource today! This Article is brought to you for free and open access by the Center for Advanced Human Resource Studies (CAHRS) at DigitalCommons@ILR. It has been accepted for inclusion in CAHRS Working Paper Series by an authorized administrator of DigitalCommons@ILR. For more information, please contact hlmdigital@cornell.edu.

2 Design, Implementation, and Evaluation of HR Leadership Development s Abstract Given today s new market reality and rapid changes in the business world, companies need to select and develop high potential talent who can maneuver in a hypercompetitive market and ultimately fill its top-tier jobs. Organizations can utilize the Human Resource Leadership Development (HRLDP) as a tool to attract, develop and retain high potentials to fill the future HR leadership pipeline. However, an HRLDP can be controversial and tricky to implement and maintain. The goal of this report is to provide useful guidelines for those interested in designing, managing and/or evaluating the effectiveness of such programs. If carefully designed and managed well, the HRLDP can provide an effective way for organizations to train and develop the HR leadership of tomorrow. Keywords business, implementation, evaluation, HR Leadership Development s, HRLDP, leadership, development, program, organization, skills, train Disciplines Human Resources Management Comments Suggested Citation Kuok, K. L. M. & Bell, B. S. (2005). Design, implementation, and evaluation of HR leadership development programs (CAHRS Working Paper #05-02). Ithaca, NY: Cornell University, School of Industrial and Labor Relations, Center for Advanced Human Resource Studies. This article is available at DigitalCommons@ILR:

3 CAHRS at Cornell University 187 Ives Hall Ithaca, NY USA Tel W ORKING P APER S ERIES Design, Implementation, and Evaluation of HR Leadership Development s Karina Li Ming Kuok Bradford S. Bell Working Paper 05 02

4 HR Leadership Development s Design, Implementation, and Evaluation of HR Leadership Development s by Karina Li Ming Kuok School of Industrial and Labor Relations Cornell University Ithaca, NY Phone: lk30@cornell.edu and Bradford S. Bell School of Industrial and Labor Relations Cornell University Ithaca, NY Phone: Fax: bb92@cornell.edu December This paper has not undergone formal review or approval of the faculty of the ILR School. It is intended to make results of the Center research available to others interested in preliminary form to encourage discussion and suggestions. Most (if not all) of the CAHRS Working Papers are available for reading at the Catherwood Library. For information on what s available link to the Cornell Library catalog: if you wish. Page 2

5 HR Leadership Development s Abstract Given today s new market reality and rapid changes in the business world, companies need to select and develop high potential talent who can maneuver in a hypercompetitive market and ultimately fill its top-tier jobs. Organizations can utilize the Human Resource Leadership Development (HRLDP) as a tool to attract, develop and retain high potentials to fill the future HR leadership pipeline. However, an HRLDP can be controversial and tricky to implement and maintain. The goal of this report is to provide useful guidelines for those interested in designing, managing and/or evaluating the effectiveness of such programs. If carefully designed and managed well, the HRLDP can provide an effective way for organizations to train and develop the HR leadership of tomorrow. Page 3

6 HR Leadership Development s Design, Implementation, and Evaluation of HR Leadership Development s Changes in the global marketplace and increased competition from expanding thirdworld economies has forced many organizations large and small to undergo reorganization and restructuring in an effort not only to compete but in many cases, just to survive. In order to compete globally, organizations must have experienced managers who can recognize and adapt to changing markets, and also have the ability to mobilize internal resources so as to capitalize on growth opportunities (McClelland, 1994). Hence, open competition forces organizations to rethink their competitive strategies and develop new, more effective ways to compete. In addition to competing for customers, markets, and raw material pricing, companies must also compete across industries for managerial talent (Feild & Harris, 1992). Since highpotential talent is in high demand, companies who are unable to readily buy talent are turning to growing their own talent in-house. In the long run, talent built in-house brings the advantages of lower salary costs, better assimilation to organizational culture, and an established employee track record. Organizations are increasingly implementing rotational development programs as a way to attract, retain and develop high potential talent to the organization (Burke, 1997; Frase- Blunt, 2001). The rotational development program refers to a formalized development program tailored to a few select participants who are recognized to have upper level managerial talent (Feild & Harris, 1991). Companies aggressively select high potential talent and groom them through a series of accelerated and challenging rotational assignments, so as to make their talents quickly available to the organization (Feild & Harris, 1991; Burke, 1997). The high-profile rotational assignments and development opportunities help to attract and retain high-potential individuals who are drawn by the special attention afforded to them and by the opportunities for rapid promotion to leadership roles. Rotational s also support HR workforce planning Page 4

7 HR Leadership Development s efforts because it forces organizations to review their available managerial talent, identify potential gaps, and start developing the talent that will be needed in the future. Organizations are able to gain competitive advantage because the accelerated development program makes it possible to quickly prepare highly talented managers to assume positions in which they can maximize their contributions to the organization (Feild & Harris, 1991). In Training magazine s list of Top 100 Companies for Training, more than 50 percent of the companies provide employees with the opportunity to participate in rotation programs (Corporate Leadership Council, 2004). Typically, rotational development programs assign new hires to work for specified periods in various departments, business units or geographical locations. Organizations typically run multiple, functional rotation programs, which focus on developing future leadership bench strength in areas such as finance, engineering, marketing, information management, operations management, and human resources. The programs seek to achieve the following goals: groom future managers and executives; socialize associates into the organization s business and culture; build depth of technical skills and breadth of cross-functional skills; and develop employees who are agile and can be staffed anywhere they are needed (Frase-Blunt, 2001). The program participant in turn benefits from the program by having exposure to the business environment, gaining a broader strategic focus, receiving more in-depth knowledge of the different business units, and having exposure to senior leadership (Kuznia, 2004). Rotational programs provide trainees with intensive accelerated experiences that would often take years to gather in a standard corporate career if at all (Frase-Blunt, 2001). Although the rotation development programs can be a source of competitive advantage, they can cause serious problems if not properly designed and implemented (Field & Harris, 1992). Despite the fairly widespread use of these programs, there are few guidelines or available information for those interested in designing, managing or evaluating the effectiveness of such programs. The goal of this report is to present a framework to shed more light on the Page 5

8 HR Leadership Development s design and implementation of rotational programs. Specifically, we will be focusing on the design, implementation and evaluation of the Human Resource Leadership Development s (HRLDP). The report is based on a comprehensive search of published materials regarding the structure and administration of rotation programs as well as findings from phone interviews conducted with HRLDP Managers at 16 companies. The Appendix section includes the HRLDP profiles for each of the participating companies. Framework for Effective Management and Evaluation of HRLDP The HRLDP must be formally administered and structured, so that program participants are able to master the functional and management competencies needed to successfully assume leadership positions within the organization (Corporate Leadership Council, 2004). The following provides a process framework for the effective management and evaluation of the HRLDP: I. Needs Assessment and Stakeholder Buy-In II. Design and Implementation III. Evaluation Needs Assessment and Stakeholder Buy-In As with all other organizational practices, the effective implementation of the HRLDP will depend on how well it is linked and aligned with the organizational strategy. Oftentimes, organizations do not take the important first step in clearly identifying the business need for the HRLDP. According to research, there is typically a weak link between business strategy and management development objectives (Kuznia, 2004). To have maximum impact, the HRLDP must be based on an explicit strategy that will support the organization s strategy. If there is no clear sense of how the program will support the company s business strategy, the program design will be misguided (Burke, 1997; Kuznia, 2004). Some questions that the organization should reflect on include: Why does the organization need a HRLDP? How will the program support the business strategy and improve Page 6

9 HR Leadership Development s the organization s competitive advantage? How will the HRLDP help the organization fulfill its leadership needs for the future? (Burke, 1997) Hence, before deciding to implement the program, the organization must determine the extent to which a business need exists for creating and managing the HRLDP. An organization s possible strategy may include addressing future shortage of managerial talent post baby boomer retirement, competing in a global marketplace, expanding to new markets, providing customer value, increasing quality, and improving innovation. Each of these strategies will impact the program design and implementation in terms of candidate selection criteria, types of assignments and also the supplementary training and development curriculum available for the program. For example, several of the companies that were interviewed have included international rotational assignments into their program because they see the strategic need to groom successful global managers who have a broad cultural perspective and can understand the complexities of operating in a global environment. Company B and Company O fully incorporate the international assignment as part of their HRLDP model, while Company A, Company I, Company J, Company L and Company M only provide the overseas assignment opportunity to select program associates based on business needs and outstanding performance. Although other companies realize the importance of providing the high potentials with a global perspective, many are also cognizant of the high costs involved of relocating the associate abroad. Another critical criteria for success is to secure executive-level and company-wide support for the program. This will help to make the program more attractive to program associates, encourage line ownership and also help to reduce any negative animosity from nonprogram participants (Feild & Harris, 1992). Top management and executive-level buy-in is important to the success of the program because they approve the budget, can integrate program management across the business units, and will also be involved in mentoring and other program activities. participants will relish the exposure and networking Page 7

10 HR Leadership Development s opportunities with the executives and can learn from them. Although the majority of the participating companies report that they have tremendous senior leadership support for the program, several companies indicated that one of their main challenges is to get all their leaders to support the program. The lack of leadership buy-in leads to other challenges, such as push back from the organization about not wanting to invest the time and resources to nurture and develop in-house talent and difficulty in garnering executive involvement in networking and monthly leadership presentations. Line managers must also be convinced that their role in developing participants is important, and that the program is worthwhile and in support of the business strategy. Since line managers often have direct interaction with the program associates, they are key to shaping the associates development. Line managers who are committed and share a vision of the program will devote more time and effort towards developing their associates for the good of the organization (Feild & Harris, 1992). It is important to carefully select the assignment supervisors to ensure that they have strong leadership skills and are excited about developing the associates. Many of the profiled companies say that they are very careful in selecting the right assignment and supervisor for the participant. Company I and Company L both mentioned during their interviews that they spend tremendous due diligence in selecting supervisors who are good leadership role-models. In addition to looking for managers with a track record of fully supporting the development of their direct reports, program managers also request that the supervisors fill out a full developmental plan on how they plan to develop the associate during the assignment. Design and Implementation After establishing that the organization will benefit from the HRLDP and securing organizational buy-in, the firm needs to tackle the more complex step of program design and implementation. This step is composed of four key sections: selection criteria for program Page 8

11 HR Leadership Development s participants; structure of rotational assignments; supplementary development opportunities; and program administration responsibilities. Selection criteria for program participants The effectiveness and success of the HRLDP hinges on the quality of its participants. Therefore, careful attention must be given to the criteria used to select participants. In general, the companies interviewed indicated using similar standards to select participants for rotational programs:» Academic achievement» Teamwork and Leadership» Interpersonal Skills» Work Experience» Communication Skills» Flexibility and Adaptability» Analytical and Strategic Thinking There has, however, been a growing trend for companies to prefer hiring candidates with prior work experience and a business background. Based on interviews with profiled companies, the majority of them primarily recruit from the top Masters and MBA programs which have a strong focus in HR, Organizational Behavior or Industrial Labor Relations. For example, Company P is focused on actively recruiting MBA candidates with a strong passion for HR because it has found that these candidates are able to better integrate a business perspective with their HR competencies, thereby becoming more successful business partners. Company J finds that their most successful associates tend to have two to four years of experience. Likewise, based on a recent review of successful candidate profiles, Company B will be changing its selection criteria to place a greater emphasis on selecting candidates who have higher maturity levels and sufficient life experiences outside of school. These companies find that more experienced candidates are able to get more out of the HRLDP - they have the maturity and competence to interface with high level executives and provide valuable perspectives to business units whom they support. Page 9

12 HR Leadership Development s Structure of the Rotational Assignments Although the works by Burke (1997) and Feild and Harris (1992) touch on the importance of identifying which skills to develop and providing challenging assignments to help program associates grow, there is still a lack of clear guidelines on how rotational assignments should be designed and structured. The interviews with the 16 companies suggest three key elements that need to be considered in the structure of the rotational assignments: program length, assignment duration and types of assignments. Length: Based on data collected on the different models of HRLDPs at the participating companies, it is found that the length of the programs typically spans two or three years. Two-year programs seem to be more popular, as 12 out of 16 companies opt for the more accelerated program. The program length is typically dependent on the number of assignments, duration of each assignment and the resources available to manage the associates. Assignment Duration: An important consideration is the duration of each rotational assignment, as it is critical the program associates maximize their development and contribution in each assignment, yet continue to progress in their fast-paced career track (Burke, 1997). Ten of the profiled companies tend to prefer shorter assignments of six to nine months, while other companies have longer term rotation assignment of 12 to 18 months long. Companies who want to give program associates as much cross-business exposure as possible will tend to pick shorter project assignments across a multitude of business areas. For example, Company O has a set of eight HR functional areas that all associates are required to rotate through during the course of the three-year rotational program. Given this intense curriculum, some of the rotational assignments will be between two to four months for less complex project assignments, and from eight to twelve months for more complex and involved projects. Page 10

13 HR Leadership Development s Our interviews revealed that companies often struggle to determine the optimal length of rotational assignments. If an assignment is too short, associates barely have sufficient time to understand the business and progress on the learning curve before they are off to the next assignment. Further, the associates may not be in the position long enough to build strong technical expertise or to reflect on the outcomes of their decisions. Hence, accountability becomes a problem and the associate s credibility may be questioned. On the other hand, if the assignments are too long, valuable development time may be wasted and the associates will not be able to gain exposure to additional HR knowledge and skills. Two companies within the survey group, Company I and Company N, have actually decided to extend the duration of their rotational assignments from 12 months to 18 months (i.e. cutting down to two rotations per associate). According to the program manager for Company N, the change in the program structure was due to feedback from business leaders who feel that a longer assignment time frame will allow the associates to stay around long enough to be productive and make a positive impact. Ultimately, an organization must find the right balance on the duration of each rotational assignment. A balance must be struck between creating the right learning opportunity for the associate s development and achieving the organization s goal (Thompson, Kirkham & Dixon, 1985; Burke, 1997). Types of Assignments: The HRLDP is put in place to equip program associates with core skills and on the job experiences that can prepare them for HR leadership positions within the generalist or specialist functions within HR. Hence, all the rotational assignments will provide opportunities for the program associate to select assignments across generalist roles and specific functional areas of HR (e.g. Benefits & Compensation, Staffing & Recruiting, Talent Development, Training & Development, HR Systems & Operations, and etc). There are also companies who provide program associates with the opportunity to explore non-hr assignments. Company A s rotational development program model includes one rotational Page 11

14 HR Leadership Development s assignment within a non-hr area such as Operations, Marketing, Sales, or Finance, so that the program associates can gain the business acumen critical to their future success as true business partners. However, this is not a popular model, as only one or two other companies from those interviewed currently encourage program associates to undertake assignments outside of the HR function. The majority of the companies surveyed report that they work with the individual associates to review their HR knowledge and experience level and long-term career interests in order to match them with the assignments that will help them develop and meet their career goals. For example, if a program associate already has previous compensation experience, he or she will not have to rotate through compensation. This flexible developmental model is in line with the research by Heisler and Benham (1992), who recommend that assignments for developmental purposes be based on an analysis of individual needs, as individuals have differential needs and assignments teach differential lessons. Company C and Company O have both taken a different spin to design of the rotational assignments. At Company C, all program associates participate in the rotational program sequence concurrently. These rotational assignments have been matched to the company s HR business cycle (i.e., the first rotation will be in the Fall/Winter with Compensation, the second rotation will be in the Spring/Summer with Recruiting and the final rotation will be within a generalist function). By matching the rotations to the HR business cycle, program associates will be assured of a consistent experience and are able to gain full exposure during each department s peak deliverable period. Company O s rotation program model is also similar in that there is a core set of functional areas that all program associates will rotate through during their three-years. The program committee feels that it makes sense to give all program associates the same foundational knowledge in concentrations such as Benefits, Compensation, HR Operations, Labor Relations, Mergers and Integration, Talent Acquisition and Development, Generalist and an International Assignment. Page 12

15 HR Leadership Development s In addition to providing program associates with exposure to various HR functional areas, the type of assignments should encompass challenging projects that will stretch and allow associates to exercise some leadership early on in their careers. Responding to challenging situations is at the heart of managerial development, because it teaches the highpotential candidates critical lessons on how to take action quickly, how to cope with ambiguous problems and how to make choices without sufficient information. According to the results of the longitudinal study by AT&T, as cited in McCauley 1986 report on Development Experiences in Managerial Work, it was found that there is a significant relationship between early job challenge and subsequent management success. Further, high potential talent often want and need to be challenged. They want to feel like they are contributing to the success of the company (McCall, 1988). Therefore, as Byham (1999) recommends, The people earmarked as future leaders by an organization should be continually challenged and developed with new responsibilities designed to stretch their leadership competencies and expand their experience base. All program managers from the 16 companies that were surveyed said that they were very particular of the projects that are assigned to the program associates. Often, they will work very closely with the assignment supervisors to ensure that the projects will provide the associates with challenging and fulfilling work. For example, at Company J, the first rotation assigned to a program associate was to lead the agenda for an HR Leadership Team (HRLT) project to redesign the company s staffing model and establish an effective central sourcing team. Within a four-month time frame, the associate was able to diagnose the problem, synchronize the completion of seven integrated work streams, and facilitate buy-in across the HRLT and cross functional groups such as Staffing Systems, Legal, Six Sigma, Compensation, Finance, Training and Communications. The project challenged the associate, provided leadership opportunities, and offered tremendous exposure/networking opportunities with the HRLT and cross business unit stakeholders. Page 13

16 HR Leadership Development s Supplementary Developmental Opportunities In addition to the job rotation assignments, it is important to provide supplementary developmental opportunities that can help program associates develop further and contribute more effectively to the organization. Developmental processes that are commonly used to complement the accelerated job rotation program include peer buddies and mentors, executive networking, and formal skill building programs. Each of these is described briefly below. Peer Buddies and Mentors: Since peer coaches are typically alumni of the program, they are able to provide valuable advice and assist the program associates in adjusting to assignments, acclimatizing to the company, and coping with daily tasks. Typically, program associates are also paired with a senior member of the management team. The senior executive can share his or her insights and lessons learned from past experiences, as well as offer career development advice and assist associates in making professional decisions (Kuznia, 2004; Corporate Leadership Council, 2004). Peer buddies and mentors provide associates with necessary guidance and counsel to support them in their career progression, enhance their understanding of the firm s culture and politics and provide direction for how best to maneuver within the organization context (Burke, 1997). This will be invaluable in ensuring that the program associates remain on track and successfully navigate through the organization. The majority of the profiled companies match the incoming class of associates with mentors and/or peer buddies to help them learn the corporate culture and assimilate into the organization. Company N, however, does not have a formal mentoring initiative. The company does not believe in forcing a mentoring relationship, which it feels is best left to develop over time. Instead, program associates are given a list of possible mentors, and are encouraged to approach the executives on their own to set up a mentoring relationship. Regardless of whether a formal or informal mentoring approach is taken, guidance should be given to both the mentor and mentee on how to initiate the relationship, how often to meet, how to give and receive Page 14

17 HR Leadership Development s constructive criticism, as well as set up a development plan to measure the associate s progress (Otto, 1999). This helps eliminate confusion and uncertainty on how the associate should interact with the mentor, thus facilitating more effective dialogue and feedback between mentor and mentee. Executive Networking: According to the research by Feild and Harris (1991), the developmental process that is most highly associated with development effectiveness is opportunities for participants to establish a network of important company contacts. In all cases, profiled companies provide program associates with ample opportunity to interact with senior leadership either through mentoring opportunities, lunch & learn programs, or project presentations at the end of a rotational assignment. At Company J, HR leadership is heavily involved with the program and participate in monthly brown bags where they provide program associates with an insight on the issues/strategic initiatives that they are currently working on. associates greatly enjoy the learning experience, because they are naturally curious and interested about what is happening within the organization. Formal Skill Building s: In an effort to equip program associates with leadership skills and broaden their perspectives on business issues that impact the organization, many companies offer training seminars and annual training conferences which cover topics such as global standards of leadership, Six-Sigma certification, business partner skills, organizational development skills, change management, and etc. Although the majority of the skill training is focused on general skill building, several companies tend to focus more on training that is tailored to the organization s specific needs. For example, Company K s monthly half-day learning sessions are focused on providing firm specific learning, where associates discuss strategic issues that the company is currently facing. Page 15

18 HR Leadership Development s Administration The HRLDP at all profiled companies are typically managed by a corporate HR functional group such as Talent Management, Executive Staffing, College Relations, or Organizational Development. Most companies will have a designated program manager to oversee the administration of the program. At Company B, Company D and Company I, the program manager works closely with a steering committee of HR leaders to select the program associate, monitor their performance and determine rotation assignments and placement decisions. The responsibilities involved in managing the program are fairly comprehensive and covers the following areas: budgets, recruiting, assignment management and performance management. Budgets: According to the program manager at Company D, the estimated budget for administering a program with three associates a year is approximately $500,000. Company M reports that the cost incurred to sponsor each associate is approximately $90,000 annually (includes salary, overhead, and benefits costs), while Company G estimates that it takes approximately $250,000 to sponsor each associate through the two-year program. Companies tend to vary in terms of whether Corporate HR pays for the budget or whether each business unit gets prorated for the budget when a program associate rotates through their area. Some companies have adopted a hybrid approach where Corporate pays for the recruiting and initial relocation expenses, while the business units pays for the salaries of the associates. At Company A and Company C, the business unit hires each program associate directly and is therefore responsible for budget and headcount of the associate throughout the program. One issue that Company I has encountered is that smaller business units tend to feel excluded from the program associates because they cannot afford to sponsor an associate to rotate through their area. There are advantages and disadvantages to either approach. If the business unit sponsors the program associate throughout the program or for part of the assignment, there will Page 16

19 HR Leadership Development s be more line manager accountability and interest in ensuring the success of associate through the program. However, this means that Corporate will have less control over the consistency of experience and that certain business units may be left out because they lack the resources to participate. From the interviews conducted, it is unclear as to whether the source of budget control has had a direct impact on the success of the program. Recruiting: At some companies, the program manager wears many hats. In addition to administering the program, they are also tasked with recruiting candidates from the top schools to join the HRLDP. This can be overwhelming, because it is a fairly involved effort to keep up with university relations and candidate selection, while also monitoring the progress of current program associates. If resources permit, it is advisable to split up the recruiting and program management responsibilities. Company B recently split up the program management between College Relations (in charge of recruiting and selection) and Talent Management (in charge of management and development). Traditionally, the entire program was run by College Relations. Company N is currently reviewing separating the two functions. The program manager feels that in order to ensure that the program associates are getting the attention that they need, she needs to focus solely on the program management and associate development. Right now, a lot of her time is absorbed by recruiting activities such as working with targeted schools, identifying new schools, rolling out activities for appropriate campus presence, and coordinating interview schedules. Assignment Management: In order to provide a rewarding experience for the associates and to develop them to be future HR leaders, the program manager or assignment manager needs to find challenging project assignments for the associates. Typically, the program manager markets the qualification of the program associates and solicits interest from the different business units. Due to the high reputation and performance caliber of the program associates, there are often more requests than there are candidates. Companies tend to choose Page 17

20 HR Leadership Development s assignment supervisors with care. Since the program associate s experience will largely be impacted by their relationship with their supervisor, it is important to ensure that they are paired up with managers who have a track record for great leadership and management skills. Company P requests that the assignment managers submit a full development plan on how they plan to develop the associate through the project assignment. Although Company L also takes great care in choosing assignment supervisors, one challenge that it faces is that the organization changes so rapidly that program associates may sometimes face disruptions as their assignment supervisors move on to another position mid-way through the rotation. In order to better prepare assignment supervisors in managing their associates, several companies plan on developing a Manager s Guide aimed at helping them better understand the purpose of the accelerated rotational development program and guiding the development of the associates. Performance Management: An important aspect of personal development centers on developing a self-awareness of one s strengths and weaknesses. Hence, it is critical to continuously monitor the performance of the associates and provide them with timely feedback. Performance reviews are typically conducted by the assignment supervisor, who will send updates to the program manager. Companies vary as to how often the performance reviews are completed. Most companies either did it at the end of the rotational assignment, or at the midpoint as well as end of the assignment. At Company P, whose assignment durations span a year or longer, assignment supervisors provide quarterly updates to the associate and SVP of HR, in addition to completing the corporate-wide annual performance review. Given that the program administration is such an involved process, it is recommended that organizations consider implementing an automated system to help with the more effective management of the program. Company H intends to develop a more robust and automated tracking system that will send out automatic reminders for rotation reassignments and performance reviews. Company L has set up a self-service model, where associates enter their Page 18

21 HR Leadership Development s profile updates and assignment histories onto the associate network website. A truly robust program management system should have the following components (McCall, 1988):» A means for identifying and tracking high potential people across the corporation and all levels of the hierarchy, allowing for frequent updating and fluid membership» A mechanism for assessing and facilitating self-assessment of accomplishments, career experiences and demonstrated learning over time. (This will be helpful in providing program associates with the chance to reflect on what they ve learned through each rotational assignment)» A means of identifying developmental jobs throughout the company, a means for keeping track of them and what they might teach, and procedures for unblocking key assignments without losing solid performers in the process» A way to ensure that placement decisions are made in light of developmental as well as business interests, and that line managers take reasonable risks for developmental purposes» A way of keeping the managers who make placement decisions informed of available candidates from other parts of the business and provisions for keeping track of the high potentials as they move to new assignments, particularly when they go overseas Evaluation The final critical element to implementing a successful HRLP is to institute an appropriate evaluation mechanism to ensure that the program is meeting corporate objectives. Otherwise, the organization will have no way of assessing the program s contribution or revising the program to ensure greater success (Burke, 1997). Based on the interview feedback from the 16 companies, the metrics that are used to monitor program success are retention, promotion levels & succession plans, satisfaction levels, performance ratings and return on investment (ROI). Retention: All of the profiled companies report that one of the main evaluation metrics of program success is to track the retention rates of program alumni. Since the main goal of the program is to build a pipeline of future HR leadership talent, it is critical to ensure that the high potentials stay around long enough within the company to be promoted to executive band jobs. Company D reports that retention is a tremendous program challenge - many of the program alumni have since left the company. The main reasons cited for their departure are reluctance to Page 19

22 HR Leadership Development s relocate geographically and the preference for becoming HR specialists rather than generalists. Similarly, Company B grapples with the retention issue too and is trying to make a greater concerted effort to identify ways of retaining associates beyond the rotational part of the program. Although the program has been around since 1988, the company reports that very few program alumni have stayed on long enough to make it through to the executive ranks within the organization. Both Company L and Company N have noticed a trend in the retention of their program associates. Company L finds that the critical point on retaining program alumni is at the fourth or fifth year mark (i.e. program alumni tend to drop off after two to three years off the program). During this critical period, HR works with the managers to closely monitor the high potential to make sure that they remain engaged, have sufficient training and development opportunities, and are encouraged to attend networking events so that they feel more involved. Benchmark analysis is also done to ensure that compensation levels are competitive with market rates, to prevent the talent from being poached by competitors. Company N finds that the critical retention period is between three to five years out of the program, and typically at certain times of the year (mainly March, August and September). The company reports that it has recently been hit with heavy poaching by competitors. Research by Tyler (2004) found that program associates tend to have lower turnover intentions than program alumni. The results from his study revealed that program alumni experience significantly lower levels of organizational commitment due to frustrations with the employer after the program ends. One program alumni in his study complained that there was very little effort spent on making her feel like a valued employee coming off the program. Based on Tyler s findings, the high turnover intentions of program alumni is attributed to the lack of effort on the part of the employer to maintain the commitment to the employee upon graduation from the program. Similarly, Feild and Harris (1992) in-depth assessment of the entry-level, high-potential management development program in a large U.S. Fortune 200 company Page 20

23 HR Leadership Development s revealed that participants were frustrated by the lack of the employer s interest in their long-term growth. A program graduate complains, Once you have gotten through the first year or two of the program, you are forgotten about. There is no counseling or career path guidance. Little or no feedback is given to the participant. The participant essentially becomes a lost entity. The program supervisor agrees Participants aren t counseled on their careers. Their careers, after the training phase of the program, are not planed or followed closely. Year 2-5 of the program aren t developed. A mentor or counselor should be assigned to each participant. Previous participants are shuffled out and forgotten about. They are totally under-utilized and ignored. This could be a major reason for the exodus of people at this level (Feild & Harris, 1992). Clearly, this failure to focus on talent retention has led to major frustrations on the part of program alumni to the point that it dilutes their company loyalty and commitment. To address this phenomenon, it is recommended that companies provide continuous career development activities for the program alumni. This is to mitigate participant s concern that somewhere along the line, their careers will plateau. Also, it demonstrates that the company is interested in their long-term development and will continue to monitor their progress over time. As recommended by Feild and Harris (1992), It is important to embed a high potential management development program within a larger, more encompassing, and ongoing career planning and development effort. Entry-level, fast-track programs should not be a one-shot deal, but rather the first step in an encompassing and ongoing approach to strategic HR planning within the company. To accomplish this continuity, the entry-level fast-track program should serve as a feeder into other developmental programs geared to the successive stages of the participants careers (Feild & Harris, 1992). In addition, the companies should incorporate several fast-track program developmental tactics such as providing participants with opportunities to take calculated risks, experience crises and adversity, receive career guidance throughout their employment, and engage in international assignments. These tactics were closely associated with respondents Page 21

24 HR Leadership Development s assessment of recruitment/retention effectiveness, as suggested by the findings by Feild and Harris (1991). Promotion Levels and Succession Plans: Since one of the major objectives of the program is to develop high potential talent through business and leadership exposure, it is of obvious interest to track the career progression of the associates to see if they make it to the executive ranks and/or succession planning lists. All of the profiled companies currently use this as a primary measure to track program success. Company E said that historically, 20 percent of the program associates reached executive level ranks within 10 years. In the case of Company A, who has had its program in place since 1953, the program has been a tremendous success as program alumni have been able to fill executive band positions at the rate of 50 percent. Other surveyed companies are not yet able to fully measure program success through the promotion of associates to executive ranks as their HRLDPs are still relatively new. Satisfaction Levels: Several of the companies surveyed said that they will survey program participants, assignment supervisors and the clients to ensure that the program is on track with meeting their needs. Both Company E and Company N distribute evaluation/satisfaction surveys to gauge the sentiments of both the program participants and the assignment supervisors. Company D surveys the HR community to find out the impressions and feedback on the performance caliber of the program associates. Since Company J s program is relatively new, the executive sponsor of the program continues to solicit feedback from program participants to further evolve and improve the program. participants have suggested ways to enhance the program such as more flexibility, more explicit candidate profiles, greater standardization of rotational experiences, and a consistent program sponsor (each class had a different executive sponsor). Page 22

25 HR Leadership Development s Performance Ratings: Companies use performance ratings to make sure that the program associates are in the desired performance trajectory and continue to meet the highcaliber performance expected of them. Company M reported that there had been a couple associates who had been asked to leave the program in the past because they were unable to cope with the intense program and high performance expectations. Company I tracks the performance ratings of associates to ensure that they consistently rank as Effective Contributor and Exceptional Contributor, which are the top two ranks within their four-point ranking scale. Company O feels that using performance ratings as an indication of program success may be not be accurate or realistic. At times, it may be okay for the program associate to just Meet Expectations, especially if the project assignment is challenging and is used as a stretch assignment to address the associate s development gap. Although it may not be necessary for the associate to exceed expectations in all assignments, especially on stretch projects, it is still necessary for the associate to perform at the expected high performance level. The HRLDP is a very high profile program within the company. Hence, its continued success and positive impression will hinge on the outstanding performance of the program associates. Return on Investment (ROI): All but one of the profiled companies reported that they do not currently run ROI calculations to justify the program benefits. According to the program managers, the programs typically have full leadership support since they see a very real need for the organization to develop future leaders in order to maintain a sustainable competitive advantage. However, many are curious as to whether other companies are looking into ROI calculations. Only Company M has been asked to provide an ROI on the program. The program manager used more qualitative rather than quantitative measures (such as higher retention levels and better attraction tool of high potential leaders) to justify the program. The program manager at Company E suggests building an ROI model by comparing the costs of developing an internal executive candidate versus hiring an external executive candidate. Historically, 20 Page 23

26 HR Leadership Development s percent of associates will reach the executive level within 10 years. Assuming the 10-year career trajectory, the cost of recruiting, salaries, benefits, training & development of an associate can be tabulated across the 10 years as he or she gets promoted up to the executive level. This total cost number is then compared to the cost of hiring an external candidate through an Executive Search firm. Based on his calculations, the program manager found that the salary and benefits of an external hire is typically percent higher than that of an internal candidate. These figures do not include the additional cost for the Executive Search firm fees plus the intangible benefits associated with an internal candidate, such as a better cultural fit and demonstrated track record within the company. Conclusion Implementing and managing an HRLDP involves a comprehensive list of activities, ranging from needs assessment to design and implementation to evaluation. The organization must first assess the business need for the program as well as clearly align it with the organizational strategy. Next, the organization must define the selection criteria and determine the duration and type of rotational assignments. Varied rotational assignments, exposure to different business and the right mix of additional programming activities are all critical for the training and development of the high-potential talent. In addition, mentors, peer buddies and assignment supervisors can help program associates navigate through the organization and cope with demanding assignments. Most importantly, the program needs to be evaluated to make sure that it is on track and helping to achieve long-term corporate objectives. It all makes for a demanding and very ambitious plan. However, if carefully designed and managed well, the HRLDP can provide an effective way for organizations to train and develop the future HR leadership for tomorrow. The objective of this report is to provide HR practitioners with a useful guideline on designing, implementing and evaluating HRLDPs. Exhibit 1 provides a summary of the guidelines and key findings extracted from the interviews with 16 companies. Although all 16 Page 24